Take-Two Interactive Software Inc. - Q2 2026 10-Q Summary
Business Context and Reporting Period
This report covers the quarterly period ended September 30, 2025 (Fiscal Q2 2026). Take-Two Interactive is a leading developer and publisher of interactive entertainment, operating through Rockstar Games, 2K, and Zynga. The company reported a net loss for the quarter but demonstrated significant revenue growth driven by new title releases and strong performance in mobile and console segments.
Key Financial Metrics
| Metric | Q2 2026 (3 Months) | Q2 2025 (3 Months) | YTD 2026 (6 Months) | YTD 2025 (6 Months) |
|---|---|---|---|---|
| Total Net Revenue | $1,773.8M | $1,353.1M | $3,277.6M | $2,691.3M |
| Gross Profit | $980.5M (55.3%) | $727.9M (53.8%) | $1,925.5M (58.7%) | $1,499.0M (55.8%) |
| Net Loss | $(133.9M) | $(365.5M) | $(145.8M) | $(627.5M) |
| Loss Per Share (Diluted) | $(0.73) | $(2.08) | $(0.80) | $(3.61) |
| Operating Cash Flow (YTD) | $83.7M | $(319.4M) | $83.7M | $(319.4M) |
| Cash & Equivalents (End of Period) | $1,869.1M | $1,456.1M | $1,869.1M | $1,456.1M |
| Total Debt (Short + Long Term) | $3,066.6M | $3,661.1M | $3,066.6M | $3,661.1M |
Material Changes vs. Prior Period
- Revenue Growth: Net revenue increased 31.1% year-over-year for the quarter and 21.8% year-over-year for the six-month period. Growth was driven by the release of Borderlands 4 (Sept 2025), Mafia: The Old Country (Aug 2025), and continued strength in the NBA 2K franchise and Color Block Jam.
- Margin Expansion: Gross margin improved to 55.3% (Q2) and 58.7% (YTD) compared to 53.8% and 55.8% in the prior year periods, respectively. This was primarily due to lower amortization of intangible assets following impairments in the prior year.
- Expense Management: Business reorganization expenses dropped significantly from $16.8M in Q2 2025 to $0.1M in Q2 2026, reflecting the completion of the 2024 cost reduction plan. General and administrative expenses also decreased due to lower legal fees.
- Debt Reduction: The company repaid $600.0M of its 2025 Senior Notes in April 2025, reducing total debt obligations.
- Equity Issuance: In May 2025, the company issued 5.5 million shares of common stock, raising approximately $1,192.8M in net proceeds.
Guidance, Outlook, and Risks
- Product Pipeline: Grand Theft Auto VI is scheduled for release on November 19, 2026. 2K plans to release WWE 2K26 in the remainder of fiscal 2026.
- Capital Expenditures: The company anticipates capital expenditures of approximately $180.0M for fiscal year 2026.
- Tax Legislation: The "One Big Beautiful Bill Act" (OBBB) signed in July 2025 includes provisions affecting tax credits and depreciation. While it reduced forecasted U.S. cash tax liability, the company maintains a full valuation allowance against U.S. net deferred tax assets.
- Risks: Key risks include the timing and market acceptance of new game releases, dependence on third-party hardware platforms (Sony, Microsoft), foreign currency exchange rate fluctuations, and player acquisition costs for mobile titles.
Investor Verification Checklist
- Deferred Revenue: Verify the $1,492.4M in unsatisfied performance obligations, of which $1,416.8M is expected to be recognized in the next 12 months.
- Customer Concentration: Note that the five largest customers accounted for 81.5% of net revenue in the first six months of 2026.
- Convertible Notes: Confirm the status of the remaining $29.4M principal of 2026 Convertible Notes, which mature in December 2026 and are currently not convertible.
- Impairment Reversals: Review the $4.2M recovery of previously incurred costs related to terminated development titles included in the six-month results.
- Share Repurchases: Verify that no shares were repurchased in Q2 2026, with 10.0 million shares remaining available under the current program.